Thursday, April 05, 2012

Robert Vienneau's "Speculation On Why Monetary Cranks Exist”

ROBERT VIENNEAU writes Thoughts on Economics (best described as the thinking economist’s blog) HERE

“Speculation On Why Monetary Cranks Exist”

“I think many people, without too much thought, naturally intuit: The system under which they live works fairly well. Somehow, they are being exploited.

The first idea might come partly from modifying your ideas to fit your constraints. You aren't likely to drastically change the world, so you might as well accept it as it is. Another source of the first idea is the ruling ideas of society, which as the man said, are the ideas of the ruling class. Maybe the second idea comes partly from how your success isn't as much as that of others around you.

I suggest a third element, other than the above two contradictory ideas, contributes to the formation of monetary cranks. That is a surprising revelation about some details about how some institution that you interact with every day actually works. What do you mean that banks don't have money for my deposit immediately on hand? Doesn't this paper, accepted as money, represent a quantity of gold that the government is obligated to pay out? People naturally look for a concrete foundation for their practices and are left in the air when it isn't to be found.

I suggest some combine some such mishmash of ideas to conclude that the system can be set right if one particular thing is changed. And something about money is often taken to be the thing to be changed. Others might look at rent on land. I find it suggestive that Henry George's popularity is almost contemporary with closing of the American frontier.

For purposes of this discussion, I deliberately do not identify which ideas are the crankish, whether it be advocacy for stamped money, social credit, or a belief that interest rates reflect the interaction of supply and demand for loanable funds. Nor, of course, does labeling an idea with an insult show why it is wrong, if it is.”

CommentMy reading of Robert Vienneau’s post today coincided with my earlier post on designers of utopian solutions to today’s problems in the world’s economies, and I thought it apposite to that discussion.

Nowadays, these designers of perfect or at least surpassingly better systems appear in many guises. Many of them are from the environmental and anti-growth lobbies, broadly defied. They all share the same illusion, that society can be changed in certain ways to affect a wondrous solution to major social problems. In the past, the major source for utopias were broadly socialist, itself a rainbow collection of competing visions of the socialist or communist future (some of them literally using physical violence towards each other, or at the very least using violent sectarian language to attempt to create monopoly positions of dominance in the ever shrinking numbers of their rivals and adherents).

No strain of utopian fervour, be it cataclysmic as in the socialist left, or in the fascist right, was or is immune from using extra-administrative rhetoric and organizational means to defeat their perceived mortal enemies. This can be seen in the conduct of the ‘peaceful’ global warming non-debate against skeptics, labeled as ‘deniers’ or alleged paid hacks of global corporate environment destroyers, hell-bent on the destruction of the planet, for that dreaded goal of profit.

Why do such “cranks exist” and why to they keep appearing? Because they believe in their missions, be they religious, political, racial, social, or the economy. They are in a hurry too. Moreover, only they see the truth and the way ahead to avert a pending catastrophe measured in months, years, or decades ahead.

They are truly “men and women of system”, as Adam Smith put it in his “Moral Sentiments”. Their “systems” are unlikely to be adopted but they can do a lot of damage en route to the exhaustion of their followers and the brutal course of the facts and events of social life. Whatever the dream, it isn’t going to happen. Nor is it an “insult” to describe these dreams as such, because history is the best and most reliable antidote to utopian dreaming about alternatives to markets and exchange, and whatever other phenomena is the faddish target of today’s dreamers.